# Mediation: Fiscal Channel vs Direct Demographic Effect on Ratings

| Model | Dep Var | N | Countries | R² |
|---|---|---|---|---|
| C1: Z → rating (no fiscal) | rating_numeric | 2,154 | 79 | 0.445 |
| C2: Z → rating (+ fiscal_bal) | rating_numeric | 2,087 | 79 | 0.453 |
| C3: Z → rating (+ debt) | rating_numeric | 2,048 | 79 | 0.485 |
| C4: Z → rating (+ debt + exp_rev) | rating_numeric | 2,048 | 79 | 0.487 |
| C5: Z → rating (+ debt + primary) | rating_numeric | 2,008 | 78 | 0.504 |

## Key Coefficients

| Model | Variable | Coef | SE | p-value | Sig |
|---|---|---|---|---|---|
| C1: Z → rating (no fiscal) | Z_1 | 14.3132 | 5.9728 | 0.0166 | ** |
| C1: Z → rating (no fiscal) | Z_2 | -1.6345 | 0.8560 | 0.0563 | * |
| C1: Z → rating (no fiscal) | Z_3 | 0.0595 | 0.0343 | 0.0831 | * |
| C2: Z → rating (+ fiscal_bal) | Z_1 | 14.4783 | 6.1314 | 0.0183 | ** |
| C2: Z → rating (+ fiscal_bal) | Z_2 | -1.6545 | 0.8796 | 0.0601 | * |
| C2: Z → rating (+ fiscal_bal) | Z_3 | 0.0603 | 0.0353 | 0.0879 | * |
| C3: Z → rating (+ debt) | Z_1 | 15.9871 | 5.9371 | 0.0071 | *** |
| C3: Z → rating (+ debt) | Z_2 | -1.8956 | 0.8518 | 0.0262 | ** |
| C3: Z → rating (+ debt) | Z_3 | 0.0712 | 0.0342 | 0.0372 | ** |
| C3: Z → rating (+ debt) | govt_debt_gdp | -0.0286 | 0.0034 | 0.0000 | *** |
| C4: Z → rating (+ debt + exp_rev) | Z_1 | 14.5825 | 5.9784 | 0.0148 | ** |
| C4: Z → rating (+ debt + exp_rev) | Z_2 | -1.6974 | 0.8575 | 0.0479 | ** |
| C4: Z → rating (+ debt + exp_rev) | Z_3 | 0.0636 | 0.0344 | 0.0644 | * |
| C4: Z → rating (+ debt + exp_rev) | govt_debt_gdp | -0.0286 | 0.0034 | 0.0000 | *** |
| C4: Z → rating (+ debt + exp_rev) | exp_rev_gap | -0.0406 | 0.0212 | 0.0555 | * |
| C5: Z → rating (+ debt + primary) | Z_1 | 16.8414 | 5.9992 | 0.0050 | *** |
| C5: Z → rating (+ debt + primary) | Z_2 | -2.0495 | 0.8613 | 0.0174 | ** |
| C5: Z → rating (+ debt + primary) | Z_3 | 0.0781 | 0.0345 | 0.0236 | ** |
| C5: Z → rating (+ debt + primary) | govt_debt_gdp | -0.0283 | 0.0035 | 0.0000 | *** |
| C5: Z → rating (+ debt + primary) | primary_bal_gdp | -0.0535 | 0.0318 | 0.0926 | * |

*Sequential addition of fiscal controls to test mediation*